Many business leaders are of the opinion that Occupational Safety and Health Administration inspections are costly and undermine productivity. But a new study implies that couldn't be further from the truth.

In a paper published on May 17 in Science, researchers found inspections conducted in highly hazardous industries in California reduced injury claims by 9.2 percent and saved 26 percent on workers' compensation costs in the four years following inspections. On average, inspected firms saved an estimated $355,000 in injury claims and compensation for paid lost work over that period and had no discernible impact on companies' profits.

The study, co-authored by Harvard Business School Professor Michael Toffel, Hass School of Business (at University of California, Berkeley) Professor David Levine and Boston University doctoral student Matthew Johnson, analyzed workplace-inspection data compiled by Cal/OSHA. A 1993 California mandate requiring Cal/OSHA to conduct some of its inspections randomly let them evaluate the effectiveness of OSHA inspections not spurred by complaints or accidents.

"Going into the study," Toffel says, "we figured there might be a small decline, but the effects are actually quite large." The findings suggest inspections had a lasting, across-the-board impact on companies with both small (less than $2,000) and large (more than $2,000) workers' compensation claims. There was also no evidence that inspections led to declining sales or affected companies' survivability.

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Jim Johnson, group vice president of workplace safety initiatives for the National Safety Council in Itasca, Ill., believes the study demonstrates how OSHA activities are making a difference. Despite the presidential election results, he says, it makes a strong case for OSHA funding.